Diplomas should become the "qualification of choice" to rival A-levels and GCSEs, the schools secretary, Ed Balls, said yesterday, signalling new political support for overhauling the exam system. The minister launched three new diplomas, in science, languages and humanities, to be introduced by 2011 and announced a review of A-levels for 2013, creating an opportunity to scrap them should diplomas prove successful.

Steve Sinnott, general secretary of the National Union of Teachers, said the move represented a "fundamental change of heart" by the government after plans proposed in 2004 to end the historic divide between academic and vocational education by replacing GCSEs and A-levels with a diploma were all but scrapped.

The introduction of the diplomas marks the biggest schools shakeup since GCSEs began in 1986. Most schools will have to form partnerships with neighbouring schools to be able to offer the full curriculum of GCSEs, A-levels and diplomas.

Mr Balls said: "If diplomas are successfully introduced and are delivering the mix that employers and universities value, they could become the qualification of choice for young people. But, because GCSEs and A-Levels are long-established and valued qualifications, that should not be decided by any pre-emptive government decision, but by the demands of young people, schools and colleges."

The announcement came at an event hosted by the Confederation of British Industry. The three new diplomas, to be added to the list of 14 vocational diplomas planned by 2011, are being introduced in more traditionally academic subjects.

The move is designed to take pressure off students to specialise in vocational areas too early. But the new diploma will compete for students who would normally take A-levels. Mr Balls acknowledged there had to be a careful campaign to sell the idea to students as well as universities and employers. He said: "We need the business and academic worlds to continue to back these qualifications and help make them a success. With their support, I believe that diplomas could emerge as the jewel of our education system."

The first five - in construction, media, engineering, IT and society, and health and development - will be taught next September to nearly 40,000 young people in almost 900 schools and colleges. They will choose which qualification to take in the new year.